Introduction to Economics The Second Quiz Review

This is a basic condition of living on this planet, there is only so much time and resources available to us.

Scarcity

This is the knowledge of how to run a table saw without cutting your hand off, accidentally.

Human Capital

This occurs because we’ve failed to plan ahead, or maybe a big snow storm (rare though they may be) has made it hard to restock the shelves at Wegmans.

Shortage

This would include, dirt, a building, corn seed, a hammer, post-it-notes, a typewriter and a person who can actually type.

Factors of Production

Speaking of which, this would include the effort someone provides, for pay, to provide you a doughnut and coffee.

Labor

This is the trade-off every government has to make for its people, the USSR did a poor job, the United States on the other hand, did a good job

Guns or butter

With almost every trade off, one of the rejected alternatives is more desirable than the other choices. This most desirable choice is called

Opportunity Cost

This is the study of how we, and you, satisfy our unlimited wants with our unlimited resources.

Economics

What does thinking at the margin mean?

When you start considering the idea of adding another worker or another tool or line of workers – and the benefits or costs thereof.

This is the cost of adding one unit, whether it be sleeping an extra hour or adding another deep fat fryer at McDonalds.

Marginal Cost

This is the extra benefit of adding one more unit.

Marginal Benefit

This is a graph that shows alternative ways to use an economy’s productive resources.

Production Possibilities Curve

This is the use of fewer resources than the economy is capable of producing.

Underutilization

This shows the combination of both options available, like guns or butter, tanks and wheat, shoes and candy bars.

Production Possibilities Frontier

This is the use of resources in such a way as to maximize the output of goods and services

Efficiency

Well, there you have it, all you need to do well on the next quiz. The only thing missing is trading off some free time for study time.